Mexico oil politics keeps riches just out of reach
By Clifford Krauss and Elisabeth Malkin
The New York Times
To the Mexican people, one of the great achievements in their history was the day their president kicked out foreign oil companies in 1938. Thus, they celebrate March 18 as a civic holiday.
Yet today, that 72-year-old act has put Mexico in a straitjacket, one that threatens both the welfare of the country and the oil supply of the United States.
Pemex, the national oil company created after the 1938 seizure, is entering a period of turmoil. Oil production in its aging fields is sagging so rapidly that Mexico, long one of the world’s top oil-exporting countries, could begin importing oil within the decade.
Mexico is among the three leading foreign suppliers of oil to the United States, along with Canada and Saudi Arabia.
Mexican barrels can be replaced, but at a cost. It means greater American dependence on unfriendly countries like Venezuela, unstable countries like Nigeria and Iraq, and on the oil sands of Canada, an environmentally destructive form of oil production.
“As you lose Mexican oil, you lose a critical supply,” said Jeremy M. Martin, director of the energy program at the Institute of the Americas at the University of California, San Diego. “It’s not just about energy security but national security, because our neighbor’s economic and political well-being is largely linked to its capacity to produce and export oil.”
Mexico probably still has plenty of oil, especially beneath the deep waters of the Gulf of Mexico, but Pemex lacks the technology and know-how to get it out. Inviting foreign companies into the country to help is one of the touchiest propositions in Mexican politics.
As the Mexican government struggles to find a way forward, production keeps falling.
